This article is written by R Sai Gayatri, from Post Graduate College of Law, Osmania University. This article deals with Trademark Law in India and the case of Neon Laboratories Ltd. v Medical Technologies Ltd. and Ors.
Have you ever noticed a TM or ® symbol on certain products and service advertisements? That symbol represents a trademark. A trademark is a unique sign or identification mark that is used by companies, businesses, an individual or any other legal entity to indicate the genuineness of a product’s or service’s source. In the case where a trademark is assigned to some service, then it is known as a service mark. A trademark can be in the form of a logo, word, symbol, name, image, design or a combination of these, however, a trademark may also deviate from these standard categories. The genuineness of products and services is established by a trademark, hence, the trademark owners protect their trademarks by registering them. However, the registration of trademarks is not easy as it seems. There are various instances where trademark registrations put the courts in complex situations. In this particular article, we will be dealing with the case of Neon Laboratories Ltd. v. Medical Technologies Ltd. and Ors. in detail.
Definition of trademark
Trademark, a kind of intellectual property right, includes any name, symbol, word, device or a combination of the said elements. It is used in commerce to recognize and differentiate the goods of one manufacturer from the others. It also indicates the genuineness and source of the goods. Trademark represents a brand name.
As per Section 2(zb) of the Trademark Act, 1999, a ‘trademark’ is a mark that is represented graphically, it is capable of differentiating the goods and services of one manufacturer from those of others. The trademark may depend on the packaging of goods, combination of colours used, shape of the goods and so on.
The term ‘mark’ is further defined under Section 2(m) of the Trademark Act, 1999. A ‘mark’ includes a brand, heading, label, device, name, word, numeral, ticket, packaging, a combination of colours, shape of goods or any combination thereof.
Owner of a trademark
A trademark protects the owner of a mark by providing exclusive rights to use it for recognition of the goods and services or to give authorization to another to use such mark in exchange for a payment. A trademark allows the owner of the mark or the registered proprietor to stop other traders from using their trademark unlawfully.
As per Section 28 of the Trademarks Act, 1999, a registered trademark provides the power to its registered proprietor the exclusive rights to use the trademark concerning the goods for which the trademark is registered and to obtain relief regarding the trademark as per the provisions of the Trademarks Act, 1999. In case an infringement of the trademark takes place, then the registered proprietor can file a suit in the court of law and obtain – an injunction, damages and account of profits.
Section 18(1) of the Trademark Act, 1999 states that any individual who claims to be the proprietor of a trademark that is being used or intended to be used by him may apply in writing under the prescribed procedure for registration. The said application must enumerate the name of the trademark, goods and services, the category in which such goods and services fall, the name and address of the applicant and the period for which the trademark shall be used. Any individual, here, refers to an association of persons, a Trust, a Partnership firm, a company (either incorporated or not), the Central or State government.
Procedure for registration of a trademark
- Search for a logo, name, device and mark that is intended to be applied as a trademark for registration.
- Apply for trademark registration.
- The registry examines the application and issues an examination report raising objections under the respective sections of the Trademarks Act, 1999.
- A reply to the objections of the registry must be provided and if required a hearing must be asked for. The applicant of the trademark must file evidence in support of the trademark application.
- An advertisement must be published in the trademark journal or official gazette for the purpose of opposition filed by the public within 90 days from the date of such publication.
- In case no opposition is received, a registration certificate is issued in favour of the applicant. The registration certificate shall be valid for a period of 10 years. After ten years, the same registration certificate can be renewed after paying the respective renewal fees.
Trademark is an intellectual property right and if any person violates such a right it shall be considered as trademark infringement. Section 29 of the Trademarks Act, 1999 deals with trademark infringement. A registered trademark is said to be infringed when a person uses such a registered trademark as their trade name or part of their trade name or name of their business concern or part of the name of their business concern dealing in goods and services regarding which the trademark has been registered. In simple words, trademark infringement refers to the use of a trademark by a person who is not the owner or the registered proprietor of such a trademark.
The following acts shall be considered as trademark infringement according to the Trademark Act, 1999-
- If the mark found is a copy of the whole registered trademark with few alterations and additions.
- If such infringed trademark is being used in the course of trade.
- If such infringed trademark is printed or represented in an advertisement. However, if a trademark is being used orally, it shall not be deemed as infringement.
- If such infringed trademark closely resembles the registered trademark causing or likely to cause confusion or deception regarding the goods for which such trademark has been registered.
Protection against trademark infringement
As per Section 29 of the Trademark Act, 1999 the unlawful use of a registered trademark by an individual who is not the owner or the registered proprietor or registered user of such trademark shall be considered as trademark infringement. The owner or registered proprietor of the registered trademark has the option to take action or obtain relief for such trademark infringement.
The Supreme Court stated that in an action for infringement, the two marks in question must be identical for the infringement to be made out. Similarly, the court shall compare the two marks in question with regard to their degree of resemblance based on visual, phonetic or other elements and whether such elements as represented by the owner of the trademark or the registered proprietor are put into use by another person, only then the court may decide the matter.
In the case of Hearst Corporation v. Dalal Street Communication Ltd., it was held that a trademark is considered to be infringed when a person with regard to his business uses a mark that is deceptively similar or identical to the registered trademark of another company.
Infringement and passing off
The action for infringement is a statutory remedy and the action for passing off is a common law remedy. Passing off is a common-law tort that is used to exercise unregistered trademark rights. It restricts an individual from misrepresenting their goods and services as that of another. To prove that a trademark infringement has occurred, it is imperative to show that the infringing mark is deceptively similar or identical to the registered trademark and no further proof is required. However, in an action for passing off merely proving that the mark is deceptively similar or identical to the registered trademark is not enough. The use of the mark must be causing or likely to cause deception and confusion with regard to the goods and services for which the registered trademark is being used. In a suit for infringement, it is not necessary that the mark being used by the defendant must cause an injury to the plaintiff. But in the case of passing off, it is important to note whether the use of the mark by the defendant is causing or is likely to cause damage or injury to the plaintiff’s goodwill.
A registered trademark is only concerned with a particular category of goods, therefore, the protection only extends to the extent of such goods. However, in a passing off action, it is not compulsory that the goods of the defendant must be of the same category, they may be related goods or even different goods.
The case of Neon Laboratories Ltd. v. Medical Technologies Ltd. and Ors.
Brief facts of the case
- Both the parties to the case i.e, Neon Laboratories and Medical Technologies were involved in manufacturing and marketing pharmaceuticals. In the year 1992, the Appellant i.e, Neon Laboratories filed an application for registration of the mark ‘ROFOL’ which was granted in 2001. However, Neon Laboratories did not introduce any product in the name of the registered trademark until 2004.
- The respondent i.e, Medical Technologies in 1998 introduced a generic drug by the name ‘PROPOFOL’ in the Indian market, which was being marketed under the name ‘PROFOL’. Later, an amalgamation of the predecessor-in-title took place which resulted in granting the trademark ownership of ‘PROFOL’ to the respondent. The respondent proceeded to register the trademark and also began using it.
- In 2005, Medical Technologies learnt that Neon Laboratories had introduced a similar generic drug under the trademark ‘ROFOL’. As a result, Medical Technologies filed a suit against Neon Laboratories for using a trademark that is deceptively similar and identical to their trademark ‘PROFOL’. A suit was filed in the trial court of Ahmedabad for passing off by Medical Technologies. A temporary injunction was granted against Neon Laboratories by the said court. The same decision was reaffirmed by the High Court of Gujarat on an appeal. Neon Laboratories further appealed to the Supreme Court of India against the order of the High Court of Gujarat which represents the present case.
Issue before the court
The issue before the court was whether credence must be given to the party that registered the trademark first or the party that introduced the drug in the market first.
Judgement of the case
The Supreme Court of India at the beginning of hearing the said case stated that an appeal against interlocutory order was not generally heard by it. However, due to the slow disposal rate and the far-reaching outcomes of temporary injunctions, the leave to hear the present case was granted by the Supreme Court.
The factors considered before granting a temporary injunction are as follows –
- Whether a prima facie case has been established in favour of the applicant.
- Whether the balance of convenience lies in favour of the applicant.
- Whether the applicant will be subjected to irreparable damage and loss if the injunction is not granted.
The Supreme Court held that all three factors were in favour of the respondent i.e, Medical Technologies. The respondent successfully established a prima facie case by providing sufficient proof that they had been using their trademark way before the Defendant-Appellant i.e, Neon Laboratories started using a closely similar or identical trademark. Therefore, based on the ‘first in the market’ test the respondent was entitled to the ad interim injunction. Further, the factors of the balance of convenience and irreparable loss were also held in favour of the respondent by the Supreme Court considering the likely loss of business and goodwill. The Supreme Court opined that the injunction was granted by the trial court just a year after the defendant-appellant introduced its product so the balance of convenience would weigh in favour of the respondent.
Supreme Court stated that in case the defendant-appellant had started using its trademark ‘ROFOL’ before or simultaneously with or immediately after the respondent began marketing their products under the trademark ‘PROFOL’, the registration of trademark ‘ROFOL’ having retrospective effect from the date of its application would help the case to be decided in favour of the defendant-appellant. However, the defendant-appellant did not take any action in introducing its products under the trademark ‘ROFOL’ in the market. Also, when the application for registration was pending, the appellant was ‘legally lethargic’ to take any action that would restrict the respondents from using the trademark ‘PROFOL’. The Supreme Court also stated that the litigation was initiated by the respondents and not the appellants who could have objected to the use of a similar trademark by the respondent. The Supreme Court re-affirmed the decision of the Trial Court and the High Court of Gujarat that granted the injunction in favour of the respondent.
Rights of the prior user of trademark
Under the Trademark law of India, it is a well-established judicial principle that the prior use of the goods will overpower the subsequent user even if such subsequent user has a registered trademark. As a result, the rights conferred by a registered trademark may be impacted by the rights of the prior user of such a mark. In the case of S. Syed Mohideen v. P. Sulochana Bai, the Apex Court had held that the scheme of the Trademark Act, 1999 is such that it identifies the rights of the prior user superior to that of the registered proprietor. Further, the registered proprietor shall not interfere with the rights of the prior user.
Section 34 of the Trademark Act, 1999 provides a statutory basis to the said principle. It states that a registered proprietor of a trademark shall not interfere with the use of any similar or identical mark which has been put to use by a person at an earlier date when compared to the registered proprietor.
A trademark belongs to the family of intellectual property rights. A trademark may be represented by a logo, word, symbol, name and so on. It helps the consumers to recognize the genuineness of various products and services. The existence of trademarks further helps the consumers to differentiate the goods and services of one manufacturer from the others. It also indicates the source of the goods. Trademark represents a brand name. Thus, it becomes extremely important to register a trademark. The Trademark Act, 1999 governs the trademark law in India. It enumerates procedures for the recognition, registration, infringement and various other aspects relating to trademarks. Through the case of Neon Laboratories Ltd. v Medical Technologies Ltd. and Ors., it has been established that mere registration of a trademark is not sufficient to stop prior users from using a mark similar or identical to the registered trademark. Therefore, it is essential to conduct thorough research before registering a trademark to avoid using a mark similar to the one being used by prior users even if not registered.
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